Select group's bed on lake (7)
I believe the answer is:
coterie
'select group's' is the definition.
(I've seen this before)
'bed on lake' is the wordplay.
'bed' becomes 'cot' (cot is a kind of bed).
'on' is a charade indicator (letters next to each other).
'lake' becomes 'Erie' (Lake Erie is one of the Canadian/US 'Great Lakes').
'cot'+'erie'='COTERIE'
(Other definitions for coterie that I've seen before include "Exclusive circle of people with common purpose" , "Small exclusive group of friends" , "Small exclusive group of people" , "Exclusive group with shared interests" , "Group, band" .)